Advancement of technology brought in different ways for companies to conveniently use social media for the promotion of their products. The shift from traditional marketing to companies using different social media platforms, such as TikTok, Facebook, Instagram and Twitter, make it convenient for companies to reach out to wider audiences of various demographics. Since these platforms are based on user interaction, this paper explains how social networks have provided opportunities and challenges to modern marketers. Particularly this paper presents in-depth analysis on social media’s transformation and impact on contemporary marketing approaches, centered on three factors—user-generated content, social media analytic tools, and influencers. This paper reviewed case studies, extant literature in the field, and articles critically evaluating marketing strategies on various platforms. Through this comprehensive review, this paper identified opportunities and challenges impacting social media marketing. It further discusses and explains how the marketing field is adapting to new challenges that arise due to algorithmic developments in social media. Artificial intelligence and machine learning will be referenced as well as augmented reality in the final discussion of the paper in regard to future research.